Electrolux to cut 3 000 jobs
Electrolux, the world's second-biggest home appliances maker by sales, said on Monday it would undershoot its 2008 earnings forecast and cut over 3,000 jobs globally amid an abrupt slowdown in demand.
The Swedish firm claimed that demand for appliances in Europe and North America had declined considerably in the two last weeks of November and so far in December.
Electrolux’s rivals have also been hit by declining sales of consumer durables as the economic downturn has worsened, with unlisted German automotive components and household appliances maker Robert Bosch saying on Friday it would miss its 2008 targets and saw no growth in 2009.
The world’s biggest appliance maker by sales, Whirlpool Corp, had slashed its full-year outlook at the end of October, saying it would cut 7 per cent of its workforce.
“This was another step in the wrong direction,” said Frans Hoyer, analyst at Proactive Independent Ideas.
“There has been an ongoing restructuring programme which is coming to an end. However these new measures are over and above this so this message was not expected.”
Nordea analyst Johan Trocme said he was not surprised by the news. “Demand is obviously weak,” he said.
Electrolux, which sells appliances under its own name as well as brands AEG-Electrolux, Eureka and Frigidaire, said that, in the 11 months to November, comparable operating income was around 2.7 billion Swedish crowns ($337m).
“As a consequence ... it is no longer possible to achieve the outlook of an operating income in 2008 of 3.3 billion to 3.9 billion crowns,” the firm said.
Electrolux spokesman Anders Edholm said the firm would have made most of its fourth-quarter earnings of 800 million crowns in October.
Sales in December are relatively low, and there is a risk that operating income for the month will be slightly negative, the company said.
It said it would intensify cost savings introduced through 2008 and that the new measures to cut staff would cost around 1.2 billion crowns, to be booked in the fourth quarter.
It said savings from the programme were expected to amount to around 1.1 billion crowns on a yearly basis, with full effect as of 2010.
In the third quarter the company had around 56,000 employees. The company earlier this year announced a restructuring of its Italian manufacturing base, closing a refrigerator factory in Scandicci and concentrating production at Susegana.